Keeping Co-ops Competitive

With the influx of foreign buyers to the New York City market and the addition of numerous condominium developments, it has been easy to spot the lackluster performance of co-ops versus condos. Warburg Realty president, Frederick Peters, takes this issue on in his most recent blog post, "Can Co-ops Keep Up?".

Peters points out that more buyers are "opting out for the simplicity of condo purchases."  He lays out a series of recommendations that were part of a brainstorm among industry leaders. Unfortunately, he doesn't describe that forum, but the recommendations include some sensible changes. Here they are with our comments:

• Modify summer-only renovation rules: a staple of many co-ops makes it difficult for new residents to move in quickly.
  
• Make the process more flexible: especially for younger buyers who are often priced out of building with strict financial requirements that never look at a young family's potential; the downside is co-op buildings that have little to no diversity of all forms.
  
• Simplify the financial disclosure requirements: these reach onerous proportions. We would add that the proper disposal of these financial records be a must. 
  
• Modify trust and corporate ownership rules: especially useful for prospective buyers wishing to maintain some level of anonymity. 
  
• Create time parameters: boards that string buyers along for months are really not doing their job properly. 

As anxious co-op sellers routinely watch qualified buyers opt for condos, we are pleased that an industry leader is trying to address these concerns.